Responsibility, it is taught to us from the first public tantrum we throw from our stroller. If you cannot mind yourself and be responsible for your actions, you will not get the benefits that naturally flow from good behavior. This idea of taking responsibility for bad behavior is an important hallmark of our economy. To get colloquial, ‘to those whom much is given, much is expected.’
We expect leaders in society, politics, and in the economy to observe restraint and good sense. The apparent betrayal of this expectation is what upsets us most. What’s more, we are currently seeing it from the newly established government in Washington, D.C. Timothy Geithner, the new Treasury Secretary under President Obama, is insistent that an additional round of spending, on the order of close to $1 trillion dollars, is just what the doctor ordered. This plan has been introduced officially as the “HR1: American Recovery and Reinvestment Act of 2009.” There is no explanation in fact, history, or otherwise to support this plan. Instead, it appears that this plan will push through pork, of epic proportions, and fully fund various liberal governmental projects that have rightly been blocked by conservative members of congress for decades. But what about infrastructural improvements to boost the economy you say? That accounts for merely 1/4 of the so called stimulus plan.
For those keeping count of the national deficit that my generation is going to shoulder, it is estimated that this will push us over the $10 trillion dollar mark. As an example of this insanity, it is estimated that in FY2008 alone, we paid over $412 billion dollars in interest to foreign governments holding U.S. debt. Nearly, half a trillion dollars was spent last year, just to maintain our ability to borrow more money. Yet, Mr. Geithner insists that we need to spend more to pull our way out of it.
Why don’t we boldly attempt to use market-based economics? Perhaps allow bad economic actors to fail for making bad decisions, and allow the ones who make superior decisions to succeed. This will create pro-competitive economic markets that will find their way to the most efficient, profitable outcome. Is it more painful in the short run? Possibly. Is it more profitable in the long run? Yes, just ask the Congressional Budget Office if you need more convincing.
This market-based economics idea is something I think I remember hearing about in Econ-101. Think it over.
CBO’s blog (who knew the CBO knew how to blog?): http://cboblog.cbo.gov/?p=205